Finizio's padded budget would jack up NL taxes

Published April 08. 2014 12:01AM

By ADAM SPRECACE

Count me among the fortunate. My New London property value dropped more than 30 percent in the recent revaluation and insulated me from Mayor Daryl Justin Finizio's proposed tax increase. While my taxes will only increase $11, anyone unlucky enough to retain the value of their property will see their taxes increase more than $2,400 (assuming a $200,000 assessment) if this budget plan is approved.

It was clever of the administration to advertise the budget proposal as only a 7.2 percent increase. However, this percentage reflects the increase in cost, not the increase in taxes needed to pay that cost. In order to pay the almost $6 million increase, the tax rate has to increase by the equivalent of approximately 4 mills (about 15 percent) beyond the status quo amount. Add the confusion of revaluation, and many won't recognize how much their taxes are increasing until it's too late.

This year's budget proposal includes an increase of $1.4 million in the New London Police Department. After ensuring the public that the issues causing the exodus of previous officers are resolved, yes, hire more police officers. However, can the city recruit, test, hire, and train what amounts to approximately 22 officers in one year? Note that all money left unspent in this line item will be used by the administration without City Council approval, as has been the unfortunate practice to date.

The budget proposal also includes an increase of over $500,000 (about 58 percent more) in overtime for the New London Fire Department. The cost of 401(a) retirement contributions is up over $400,000. The projected cost of city contributions to the Connecticut Municipal Employee Retirement System (CMERS) is down despite all the planned hiring in the police department. This appears to be a sign that the budget-savings agreement to move firefighters from 401(a) plans to CMERS has collapsed. I hope I'm wrong.

Increases in salary line items suggest employee hiring will include one or two in the Personnel Department, two in the Finance Department, one at the Senior Center, one at the Office of Development and Planning, and 12 at the Public Works Department. I must have missed some, since the increase in medical benefit costs is pushing $1 million, which amounts to approximately 50 new employees with the highest level (family) benefit. Other cost drivers include a $58,000 increase for the Law Department (even though they are currently underspending their budget) and a $500,000 set aside for fund balance replenishment (though permanently bonding just the $3.1 million already authorized by the council will, as we were told at the time, solve the city's cash flow problem).

You might be thinking that such a budget proposal, even if passed by the council, would never pass a referendum. Perhaps that is true, but the history of the last two budget cycles shows that will not provide taxpayers much protection. A valid petition challenging the fiscal-year 2013 budget resulted in a referendum that was held four months after the close of the fiscal year. The fiscal-year 2014 budget was also successfully challenged, only to have its $204,000 savings, included in the fiscal-year 2015 budget, evaporate in a shell game that increased the amount of reserve expected for non-payment of taxes. That amount grew by $545,000 (a 73 percent increase) and amounts to only a 97.3 percent collection rate (ranking among the lowest ever seen in New London).

New London's financial issues are manageable without padded budgets or alarmist declarations. Some elements that I believe need to be included in the city's financial practices include adherence to protocol (for example, don't circumvent ordinances and avoid use of long-forgotten capital improvement accounts when in a deficit situation), follow-through (complete the Operational Audit commissioned more than 18 months ago and include the council in transferring funds as required per the City Charter), and disclosure (publish the financial reports identified in the Financial Reporting Ordinance voted down by the last council).

If we throw in reasonableness to this mixture, trust will follow, and then the city can begin to move forward.

Adam Sprecace is a former New London City Councilor. His tenure included 2011-2013, the first two years of Mayor Finizio's term.

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